India, Biofuels Will Help Palm Oil Sizzle

Palm oil prices are set to jump more than 20 percent by year-end as global oilseed stocks get depleted and demand from the food and fuel sectors surges, industry officials said on Wednesday.

Malaysian palm, which gained almost 40 percent last year, could move slightly downward in the near term, but surging Indian food demand and Europe’s insatiable appetite for biofuels will ensure the commodity holds on to the gains this year.
Analysts said India’s palm oil imports are expected to surge from May as rising soyoil prices and a reduction in the country’s palm oil duty last month prompt buyers to turn to palm.

“We see that India will import almost 1.5 million tonnes more of palm compared with the previous year,” Mistry said. “This greater reliance on palm will have significant bearing on the price outlook for palm products.”

“The demand will accelerate and spread to other countries like Japan and Indonesia. Renewable energy based on sugar cane or corn or oilseeds has a strong appeal for governments and a seductive charm for politicians,” Mistry said.

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